WHAT ARE YOU PAYING FOR UNLEADED GAS?
Discussion in Striping & Marking started by YOOPER (unclaimed legacy handle), Mar 13, 2005. 20 replies, last reply Mar 16, 2005.
There is more to prices at convenience stores than meets the eye. I was surprised on day to see a Texaco convenience store selling gas cheaper than some other places and way cheaper than a Texaco I had passed a few miles up the freeway. I commented to the manager as I was paying about their price being so much lower than other Texaco stores. She explained it was because they had a discount gas station about 3 blocks away. Her first duty every morning was to drive by the other station, see what they were selling the "no-name" gas for then set her price 1 cent higher. Later I mentioned that to a Diamond Shamrock manager where I usually bought gas. She said "oh I know, we do the same thing. Every day I check the EZ-Mart down the street and we set our price 1 cent higher". I'm sure like they do everything else Wally-World & Sam's negotiates with whoever is the lowest bidder that day or week or whatever and they have more clout than a regular store so they et cheaper prices and as you said can sell at little or no markup. The convenience stores I talked to all said they made their money off those high-priced sodas, coffee, beer, cigarettes, candy bars or whatever else they are selling that people always buy while they are there...not me, I pay at the pump (I'm sure Wally's & Sam's are the same way, few people would go to the hassle of getting to their gas outlets if they weren't going to think "oh I need whatever from the store while I'm here". Or else they were going to the store anyway and that gives them even more of a "draw" since at least here Target & K-Mart don't sell gas)
A little more on gas pricing...(my Dad used to be in petromarketing). The wholesaler has a tiered pricing system. Many of the major C-stores are owned by wholesalers and the get the best wholesale price. Further down the food chain are smaller multi-unit pumpers and then single unit pumpers (mom&pops). If a wholesaler is paying $1.00 at the pipeline terminal, his "best" price would be, say, $1.50 to his own stations, $1.53 to his non-affiliated superpumpers, $1.58 to smaller multipumpers and $1.63 to a single unit store. Each store can set it's own retail price according to what it can charge and meet it's quota/profit target. Small C-stores will often sell at a tiny markup just to get you in to buy the high priced "stuff" inside, where the profit is really good. Stores like Wal-Mart (Murphy's USA) and COSTCO buy through their own wholesalers and can sell it very cheaply and still make tons-o-money. The real money in marketing gas (and beer) is the transportation of the item to the store...There...more than you really wanted to know.
RandyV wrote on Mar 13, 2005:Go to #2Hey Yooper, if you are anywhere near the reservation, you should be paying less than most of us
Yes Randy I'm only about 35 miles from HannaVille Indian reservation (The Chip-In Casino) but were still paying 2.09 in Iron Mountain now......................Tom
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